Methods, systems and articles of manufacture for managing penalty fees for financial accounts

ABSTRACT

Methods, systems, and articles of manufacture are disclosed for providing a payment plan to credit card customers. A customer may be offered membership into a payment plan that allows the customer to pay past due penalty fees included in a balance associated with the customer&#39;s credit card account. Once a customer is member of the plan, a new segment is created for the customer&#39;s account. The penalty fees are removed from the balance and applied to a balance associated with the new segment. Thereafter, each time payment is received for the financial account, the payment may be applied in whole or part to the new segment&#39;s balance until it reaches zero. Subsequent payments are applied to the balance of the financial account. In one configuration, the financial account may not be charged any penalty fees while the customer is a member of the plan.

CROSS REFERENCE TO RELATED APPLICATION

This application is related to and claims the benefit of priority under35 U.S.C. 119(e) to U.S. Provisional Patent Application No. 60/329,534,filed on Oct. 17, 2001, the disclosure of which is expresslyincorporated herein by reference in its entirety.

BACKGROUND OF THE INVENTION

I. Field of the Invention

The present invention generally relates to credit card products and,more particularly, relates to systems, methods, and articles ofmanufacture for managing penalty fees for financial accounts.

II. Background and Material Information

Credit card products have become so universally well known andubiquitous that they have fundamentally changed the manner in whichfinancial transactions and dealings are viewed and conducted in societytoday. Credit card products are most commonly represented by plasticcard-like members that are offered and provided to customers throughfinancial account providers, such as banks and other financialinstitutions. With a credit card, an authorized customer or cardholderis capable of purchasing services and/or merchandise without animmediate, direct exchange of cash. Instead, with each purchase, thecardholder incurs debt to their credit card account, which thecardholder may thereafter pay upon receipt of a periodic accountstatement. In most cases, the cardholder will have the option to eitherfully pay the outstanding balance or, as a matter of necessity orchoice, defer at least a portion or the balance for later payment. Forcardholders electing to defer payment, financial account providerstypically assess interest or finance charges for the period during whichpayment of the outstanding debt is deferred.

Financial account providers assess penalty fees on customer accountsbased on, for example, past due payments and overlimit charges.Delinquent cardholders or customers can cost financial account providersmillions or even billions of dollars in revenue if payment can not berecovered. Furthermore, the financial ramifications on the delinquentcardholder is costly as well. For instance, issuers often chargecustomers penalty fees each payment period the customer has failed tomake a timely payment or reduce an overlimit credit balance on anaccount. Together with interest charges and principal balance paymentson the account, penalty fees may be more than a customer can financiallyhandle. This may cause the customer to be late in making payments oreven ignore payment deadlines.

Most financial account providers do not merely wait for delinquentcustomers to pay their debt. Instead, to recover all or a portion of thedebt, providers employ various tactics to collect payments from theirdelinquent customers. Many financial account providers initially make aneffort to collect overdue payments using some type of reminder, such asa letter or a phone call. Initial efforts are usuallynon-confrontational in instances where there has been amisunderstanding, such as the customer erroneously believing that alldebt was previously paid or the financial account provider not receivingpayments that actually were sent by the customer. A financial accountprovider often will receive payments from some customers in response tosuch a reminder. For other customers, however, this reminder may not besufficient and their debts will remain unpaid despite the initialnon-confrontational reminder(s).

Accounts that remain overdue for a lengthy period of time may bedesignated as a charged-off account. A charged-off account is an accounton which a customer has not made a payment for a predetermined timeperiod. Financial account providers consider charged-off accounts“written off” from their books (e.g., no longer receivable). Financialaccount providers may continue to attempt collection on charged-offaccounts, but customers may no longer use the account to create furtherdebt.

If initial collection efforts fail, some financial account providersresort to using debt collection agencies to collect payments fromdelinquent customers. For example, a credit issuer may give a number ofcharged-off accounts to a collection agency, while retaining ownershipof the accounts. When customers provide payments to the agency, theagency keeps a percentage (e.g., 50%) and forwards the remainder to thefinancial account provider. Financial account providers may also tryselling a portfolio of charged-off accounts to a collection agency.Under this arrangement, the agency essentially buys the portfolio for afraction of the debt amount (e.g., less than one cent per dollar) andattempts collection on the account. Accordingly, a customer then owesthe debt collecting agency instead of the original financial accountprovider. However, the practice of selling portfolios of charged-offdebt and managing the charged-off accounts is expensive for thefinancial account provider and may jeopardize relationships withcustomers.

SUMMARY OF THE INVENTION

Accordingly, there is a need for improved methods, systems, and articlesof manufacture for collecting payments on delinquent financial accounts.There is also a need for a framework to prevent delinquent financialaccounts from becoming charged-off, while maintaining viable paymentoptions for customers associated with these delinquent accounts.

Methods, systems, and articles of manufacture consistent withembodiments of the present invention enable a financial account providerto provide a payment plan to customers who have credit card accountsthat have past due payments and/or a balance that is over a creditlimit. A customer who accepts membership into the plan may have theircredit card account modified with a new segment where past due penaltyfees associated with the customer's account is placed. The financialaccount provider may allow payments directed to the customer's accountto be charged to the new segment, while at the same time not assessingadditional penalty fees that the customer's account may be eligible toreceive. Once the past due penalty fees are paid off according to apayment schedule determined in the payment plan, subsequent payments maybe credited towards the principal balance of the customer's account.Thus, the financial account provider may adjust a status associated withcustomer's account from delinquent to non-delinquent based on monitoredpayment activities of the customer.

In one embodiment of the present invention, a financial account providerdetermines a set of target customers from which to offer membership intoa payment plan. The financial account provider may extend offers tothese target customers using a variety of communication channels. Foreach of the approved target customers that accepts the offer, thefinancial account provider may create a new segment for their respectivecredit accounts and transfer any outstanding penalty fees or amounts tothe new segment. Also, additional penalty fees may be waived by thefinancial account provider while a customer is a member of the paymentplan.

In another embodiment of the present invention, a financial accountprovider monitors the progress of the customer included in the paymentplan to ensure he/she meets designated criteria, such as timely paymentsof selected amounts. The financial account provider may apply anyreceived payments to the new segment until the penalty fees includedtherein are paid off. Afterwards, the financial account provider maydirect any further payments to a principal balance associated with aprimary segment of the customer's credit card account.

It is to be understood that both the foregoing general description andthe following detailed description are exemplary and explanatory onlyand are not restrictive of the invention, as described. Further featuresand/or variations may be provided in addition to those set forth herein.For example, the present invention may be directed to variouscombinations and subcombinations of the disclosed features and/orcombinations and subcombinations of several further features disclosedbelow in the detailed description.

BRIEF DESCRIPTION OF THE DRAWINGS

The accompanying drawings, which are incorporated in and constitute apart of this specification, illustrate various embodiments and aspectsof the present invention. In the drawings:

FIG. 1 illustrates an exemplary system environment for implementingcertain embodiments of the present invention;

FIG. 2 is a flowchart of an exemplary method for offering targetcustomers membership into a repayment plan, consistent with anembodiment of the present invention;

FIG. 3 is a flowchart of an exemplary method for processing responsesfrom the target customer, consistent with an embodiment of the presentinvention; and

FIG. 4 is a flowchart of an exemplary monitoring method, consistent withan embodiment of the present invention.

DETAILED DESCRIPTION

Reference will now be made in detail to exemplary embodiments of theinvention, examples of which are illustrated in the accompanyingdrawings. Wherever possible, the same reference numbers will be usedthroughout the drawings to refer to the same or like parts.

Embodiments of the present invention are directed to methods, systems,and articles of manufacture for providing delinquent credit cardcustomers an opportunity to gain membership into a payment plan offeredby a financial account provider. The plan allows a customer to pay offoutstanding penalty fees or amounts without being assessed additionalfees that would normally be applied to their financial account. Thefinancial account provider may monitor payment activities while thecustomer is a member of the payment plan to determine whether certaincriteria associated with the selected plan have been met. If thecustomer fails to meet the criteria, their membership in the paymentplan may be revoked, and the customer's account may be processed as astandard delinquent account with assessed penalty fees. On the otherhand, if a customer meets the criteria (for example, within apredetermined time period), the financial account provider may providebenefits to the customer, such as removing a delinquent statusassociated with their account and establishing a good standing statusonce the customer removes any pending over credit limit balances.

The term “financial account,” as used herein, refers to any type offinancial possession associated with a user, such as a customer, and aprovider, such as a bank or similar financial institution. For example,a financial account may represent a credit card account, a checkingaccount, a loan account (e.g., mortgage, auto, etc.), etc. Further, asused herein, the term “penalty fees” encompasses any charges,assessments, amounts or fees that are applied against a financialaccount as a result of the occurrence of events that violate terms orconditions of the financial account. In the context of a credit cardaccount, such events may include late or past due payments and/oroverlimit charges. “Penalty fees” include individual or periodiccharges, assessments, amounts or fees.

Embodiments of the present invention may be implemented in variousenvironments. Such environments and related applications may bespecially constructed for performing the various processes andoperations of embodiments of the invention or they may include a generalpurpose computer or computing platform selectively activated orreconfigured by program code to provide the necessary functionality. Theexemplary methods disclosed herein are not inherently related to anyparticular computer or other apparatus, and aspects of these processesmay be implemented by a suitable combination of hardware, software,and/or firmware. For example, various general purpose machines may beused with programs written in accordance with teachings of theinvention, or it may be more convenient to construct a specializedapparatus or system to perform the required methods and techniques.

The present invention also relates to computer readable media thatinclude program instruction or program code for performing variouscomputer-implemented operations based on embodiments of the methods andprocesses of the invention. The program instructions may be thosespecially designed and constructed for the purposes of the invention, orthey may be of the kind well-known and available to those having skillin the computer software arts. Examples of program instructions includefor example machine code, such as produced by a compiler, and filescontaining a high level code that can be executed by the computer usingan interpreter.

FIG. 1 illustrates an exemplary system environment 1000, in whichcertain embodiments and features of the invention may be implemented. Asillustrated in FIG. 1, the system environment 1000 includes a pluralityof customers (1010-1040), a response vehicle system 1100 including aplurality of different response vehicles (1110-1140), a financialaccount provider 1200, a central database 1300, and a communicationschannel 1400.

Each customer in system environment 1000 may be associated with adifferent customer category. For instance, customer 1010 may be a Website customer that accesses and retrieves information through a Web siteon the World Wide Web of the Internet. The Web site may be a branded Website operated by one or more vendors, or may be a Web site operated by afinancial account provider. Customer 1020 may be a telephone customerthat accesses and receives information using conventional telephoniccommunication techniques and systems. This includes, for example,wireline and wireless telephony systems. Customer 1030 may be aconventional mail customer that accesses and receives information byconventional mail techniques and services. This includes, for example, acustomer that is part of a financial account provider's mailing list.Finally, customer 1040 may be a customer that accesses and receivesinformation using electronic mail services. Customer 1010-1040 may alsorepresent entities (such as an individual, a group of individuals,corporate entities, or any combination thereof) that hold credit cardaccounts with the financial account provider 1200. The categories ofcustomers illustrated in FIG. 1 are exemplary and should not beconsidered limiting. For example, a variety of different customercategories may also be implemented in environment 1000, such ascustomers using kiosk computers or personal digital assistants (PDAs),mobile phones, etc.

Response vehicle 1100 represents a system for handling communicationsbetween the customers 1010-1040 and financial account provider 1200.Response vehicle 1100 may be part of a financial account provider'snetwork and, as shown in FIG. 1, include a plurality of responsevehicles 1110-1140 that correspond to different categories of customers1010-1040. Generally, each response vehicle may be responsible forhandling communications to and from customers based on the customers'category. For example, telephone response vehicle 1120 handlestelephonic communications between the customer 1020 and financialaccount provider 1200. Thus, in the event financial account provider1200 wishes to solicit customers telephonically, response vehicle 1120includes the necessary systems to support such operations including, forexample, operators and telecommunications equipment to communicate withcustomers 1020. Response vehicle 1130, on the other hand, includes thenecessary systems and organizations to handle conventional mailprocessing to and from customers 1030. Response vehicle system 1140includes the necessary systems and organizations to process electronicmail transactions with customers 1040. Response vehicle system 1100 mayreceive responses from the customers and forward them to financialaccount provider 1200 for appropriate processing. Notifications to thecustomers also are performed from issuer 1200 to the customer throughresponse vehicle 1100. The notifications may include, for example,messages indicating acceptance into a repayment plan offered byfinancial account provider 1200.

Communication channel 1400 facilitates communications between thevarious customers and response vehicle system 1100 illustrated inFIG. 1. Such communications may include communications related tooffering and issuing lines of credit to selected customers.Communications channel 1400 may include, for example, a conventionalmail distribution network such as that provided by the U.S. PostalService, a telephony-based network, a local area network (LAN), a widearea network (WAN), a dedicated intranet, the Internet, and/or awireless network. Further, any suitable combination of wired and/orwireless components and systems may be incorporated into communicationschannel 1400. Any suitable combination of point-to-point communicationsor networked communications may also be incorporated into communicationchannel 1400 to facilitate communication between the different entitiesillustrated in FIG. 1. Moreover, any part of communication channel 1400may implemented through traditional infrastructures or channels oftrade, to permit operations associated with credit card offers to beperformed manually or in-person by the various entities illustrated inFIG. 1.

Financial account provider 1200 receives communication information fromresponse vehicle system 1100 and processes it using central database1300. Database 1300 may contain various information including creditinformation, potential customer lists, risk scores for potential andcurrent customers, approved customers, credit limits for approvedcustomers, vendor tables including merchant identification numbers,customer information, purchase information, authorization information,and/or settlement information. Issuer 1200 also sends information toresponse vehicle system 1100 for delivery to the appropriate customers.Financial account provider 1200 is responsible for providing variouscredit cards and establishing associated accounts. Financial accountprovider 1200 may include one or more of the following: a bank, anacquiring bank, a merchant bank, a merchant and/or any commercialinstitution capable of providing a financial account, such as a creditcard account, consistent with exemplary embodiments and the featuresdisclosed herein. Further, although FIG. 1 only illustrates onefinancial account provider 1200, it is of course possible that more thanone financial account provider be provided in system environment 1000.

FIG. 2 illustrates an exemplary method associated with providing offersto target customers for membership into a payment plan consistent withan embodiment of the present invention. As illustrated in FIG. 2,financial account provider 1200 may identify specific target customersto receive a payment plan membership offer (Step 210). To identifytarget customers, financial account provider 1200 may consider severalfactors. Such factors may be based on the status of a customer'saccount. For example, financial account provider 1200 may be configuredto extend offers to customer's whose credit card accounts are in adelinquent status. A delinquent status may reflect a condition where theissuer has assessed penalty fees for a credit card account with past duepayments and/or overlimit charges. Past due fees may be associated withconditions where a customer has failed to make timely payments to becredited to their credit account for a predetermined period of time.Overlimit charges may be associated with conditions where an account hasan outstanding balance that exceeds a predetermined credit limit. Forexample, for a credit card account with a credit limit of $400, acustomer may have charged purchases above this credit limit, andfinancial account provider 1200 may assess penalty fees for everypayment period the outstanding balance exceeds $400. One skilled in theart can appreciate that a number of different conditions may beconsidered by financial account provider 1200 to determine which creditcard accounts are deemed to be in delinquent status, without departingfrom the embodiments and scope of the present invention.

Once card issuer 1200 has identified a target group of customers, it maygenerate a payment plan offer for each targeted selected customer. Allof the targeted customers may receive the same payment plan offer oreach customer may receive a personalized offer based specifically onconditions associated with the customer's account.

Once the payment plan offers are generated, they are sent to responsevehicle system 1100 for distribution to the customers (Step 220). Eachresponse vehicle in vehicle 1100 processes the offers in order toprovide them to the customers through communication channel 1400. Forinstance, response vehicle 1110 formulates offers for generation andviewing on one or more Web pages or sites. The Web sites may beassociated with a card issuer's Web site or sites that are operated byselected vendors. Once each response vehicle has processed the offers,they are sent to the specified customers for response.

Customers 1010-1040 may respond (accept or decline) to the payment planoffers using the same medium or channel associated with their category,or use a different communication medium. All of the responses fromcustomers may be received by response vehicle system 1100 (Step 230),Where they are forwarded to be processed by financial account provider1200 (Step 240).

Based on the category of a customer, responses may or may not beprocessed immediately. For instance, responses may be received andprocessed instantaneously and/or automatically for customers 1010 and1020, while responses from customers 1030 may be delayed. For example,suppose a customer 1010 using a personal computer views a Web siteoperated by account provider 1200. The site may include a designatedpage that presents the customer with the payment plan membership offerdetermined by account provider 1200. The customer may decide to acceptor decline the offer by merely selecting an icon representing theirchoice and perhaps providing credit information through the Web site.The response is then sent back to response vehicle 1110. Responsevehicle 1110 processes the response and prepares it for presentation toaccount provider 1200. The response is processed by account provider1200 and a notification may be sent back to customer 1010 throughresponse vehicle 1110. The notification may indicate to the customerthat their response to an offer has been processed and that theirmembership into the payment plan has been approved. The notificationsmay be displayed through a Web page that the customer was viewing whenthe offer was presented or on a separate Web page.

As can be seen, a customer who has accepted an offer through a Web sitemay receive immediate notification of an approval for a payment planprovided by financial account provider 1200. On the other hand, acustomer who has been solicited by conventional mail, such as customer1030, may respond to the offer by mailing back an acceptance form to thecard issuer. The acceptance form may be received and processed byresponse vehicle 1130, and eventually processed by financial accountprovider 1200. Notification of an acceptance by financial accountprovider 1200 may then be sent back to the customer using the sameconventional mail process.

There may be a plurality of variations available to account provider1200 when communicating with customers. That is, a mail customer 1030may wish to respond by telephone or through a Web site. Additionally,customers may respond by one medium, and request notification byanother. For instance, a customer 1030 who has received an offer in themail, may respond by mail, yet request notification by e-mail.Accordingly, a variety of user friendly options are available tocustomers for receiving and responding to the offers presented by cardissuer 1200. The above descriptions are for illustration purposes aloneand should not be viewed as limitations to embodiments of the presentinvention. One of ordinary skill in the art can appreciate that anynumber of combinations of communication techniques may be implemented,without departing from the embodiments of the present invention.

In one embodiment, the offers for membership into the payment plan mayinclude indications of conditions and parameters associated with theplan that the customer might meet to maintain their membership. Forexample, a customer may be offered the opportunity to pay backoutstanding penalty fees while financial account provider 1200 does notcharge additional penalty fees for the customer's account beingdelinquent. That is, when a payment plan is associated with an accountthe financial account provider agrees not to charge its standardoverlimit penalty fees even though the cardholder's balance of theaccount exceeds the credit limit for that account.

As a member of the payment plan, a customer may be required to meetcertain criteria. For example, the customer may be required to makepayments associated with their selected option within a set time periodor the customer is removed from the payment plan. Also, financialaccount provider 1200 may also provide certain incentives to customerswho accept membership into the payment plan. For example, financialaccount provider may associate an indicator with the customer's creditcard account indicating that the customer is not to receive any phonecalls or communications associated with collection activities for thepast due amount while the customer is a member of the payment plan.Also, processing fees that may be assessed to electronic paymenttransactions over the Internet or telephone that are generally chargedto a standard customer (i.e., those not on the repayment plan) may bewaived by financial account provider 1200. Alternatively, financialaccount provider 1200 may reduce, or temporarily halt, interest ratecharges to the customer's account while a member of the payment plan.One skilled in the art can appreciate that financial account provider1200 may employ various incentives and criteria for the payment plan,without departing from the embodiments and scope of the invention.

FIG. 3 illustrates an exemplary method that may be performed whenprocessing a target customer's acceptance of the offers described withrespect to FIG. 2. As shown, financial account provider 1200 may receivea response from a target customer indicating their acceptance of anoffered payment plan (Step 310). Once it receives their response,financial account provider 1200 may modify the customer's financialaccount to include a new segment (Step 320). A segment may be a datastructure, such as a field, associated with a financial account storedin a file located in a memory device, such as central database 1300. Forexample, issuer 1200 may maintain an account file or record for eachfinancial account. Each file or record may include one or more segmentsthat each represent one or more credit lines and/or balances. Eachsegment may include its own parameters, such as balance, interest rates,penalty fee rates, payment periods, etc. A primary segment for anaccount may be associated with a primary line of credit from whichstandard financial account purchases are charged and payments receivedfrom a customer may be credited, such as standard credit card purchases.A secondary segment may also be associated with the same financialaccount and designated for other financial related functions, forexample cash advances for a credit card account. The secondary segmentmay have its own line of credit, an interest rate different from theprimary segment, and other parameters unique to the secondary segment.In one configuration, a new segment may be created that is associatedwith payment plan parameters. For example, the new segment may includeits own interest rate that may be set at zero, or higher, perhaps up toand even exceeding the interest rate associated with the primarysegment. A zero interest rate may be used by financial account provider1200 if no interest fees are to be charged to the new segment.

Once the new segment is created, financial account provider 1200 mayre-categorize any outstanding penalty fees associated with thecustomer's credit account into the new segment (Step 330). For example,suppose a customer has (i) a credit limit of $200, (ii) a total balanceof $450 associated with a primary segment of the account, (iii) $100 ofthe total balance reflects past due fees, and (iv) another $100 reflectsoverlimit fees. Financial account provider 1200 may re-categorize thepenalty fees by transferring $200 (representing selected penalty fees)into the new segment. Therefore, the total balance of the account wouldbe $250, and the balance associated with the new segment would be $200.In one configuration, although the primary segment still has a $50overlimit balance, financial account provider 1200 may waive any penaltyfees charged to the primary segment, while the customer is a member ofthe payment plan. Therefore, the customer may concentrate on paying offthe $200 associated with the new segment while not being assessedadditional fees for penalties corresponding to the primary segment. Inaddition to creating the new segment, financial account provider 1200may also set the parameters for the new segment, such as interest rates,payment periods, etc. Also, financial account provider 1200 may alsoreset any parameters associated with the primary credit line while thecustomer is a member in the payment plan. Once the customer's creditaccount has been re-categorized, selected fees halted, and theparameters for each segment set, or reset, financial account provider1200 may perform a monitoring process (Step 340), consistent withembodiments of the invention.

FIG. 4 shows a flowchart of an exemplary monitoring method, consistentwith an embodiment of the present invention. As illustrated in FIG. 4,financial account provider 1200 may determine whether an appropriatepayment for the customer's account is received within a designated timeperiod based on the payment plan associated with the customer (Step410). If not (Step 410; NO), the customer has failed to meet a criteriaset by financial account provider 1200 and the customer's credit cardaccount may be reset to its previous status (Step 450), and the monitorprocess ends (Step 480). Alternatively, financial account provider 1200may set the status of the customer's account to a delinquent status inStep 450. One skilled in the art can appreciate that financial accountprovider 1200 may be configured to perform various other tasks in theevent a customer has failed to meet selected criteria while a member ofthe repayment plan, without departing from the embodiment sand scope ofthe present invention. For example, a report to a credit bureau may beprovided that indicates the customer's delinquent status. Alternatively,the account may be charged off. Also, the customer's account may beremoved from the payment plan and the appropriate parameters associatedwith the payment plan eliminated, including the new segment. In oneconfiguration, the balance associated with the new segment may betransferred back to the primary segment's balance.

If, however, an appropriate payment is received within the specifiedtime period (Step 410; YES), financial account provider 1200 may adjustthe customer's account parameters associated with the new segment toreflect the received payment (Step 420). Also, the payment planparameters associated with the new segment may be adjusted. For example,suppose a payment plan member has a new segment that includes $400 oftransferred penalty fees and a primary segment with an outstandingbalance of $500 after the penalty fees were removed. Further, supposethat the payment plan called for a payment of $75 within 14 days ofbecoming a member and payments of $50 every 20 days following the firstpayment. Financial account provider 1200 may determine whether at leasta payment of $75 was credited to the customer's credit account beforethe 14 day period expired. If such a payment was received on time, thepayment may be credited directly to the outstanding balance of the newsegment. Therefore, assuming no interest charges applied to the newsegment, the outstanding balance may be modified to reflect $325.Furthermore, parameters associated with the new segment may also beadjusted, such as a time period indicator that reflects when the nextpayment may be due, such as in this example, 20 days from the due dateof the first payment. One skilled in the art can appreciate that theabove example is not intended to be limiting and financial accountprovider 1200 may apply payments to the primary and new segments inproportional amounts, such as 20% and 80%, respectively. Alternatively,interest charges may be assessed to the new segment, or the customer'saccount may be charged one or more membership fees.

After adjusting the parameters, financial account provider 1200 maydetermine whether a subsequent payment is necessary based on theparameters associated with the new segment and/or the primary segment(Step 430). For example, financial account provider 1200 may determinewhether the balance associated with the new segment is below a thresholdvalue or equal to zero to determine whether subsequent payments arerequired. If so (Step 430; YES), the monitor process determines whetherthe next payment has been received within the specified time period(Step 410), and Steps 420 and 430 are repeated until no further paymentsare necessary (e.g., the outstanding balance for the new segment iszero). At Step 460, once the customer has made all of the necessarypayments as required under the payment plan, financial account provider1200 may reset the customer's account to a previous status with previousparameters and the monitor process ends (Step 480).

In one embodiment of the present invention, the customer's financialaccount may previously have been in good standing, whereby the primarysegment does not have an outstanding balance above a determined creditlimit and there has been no past due fees charged to the customer'saccount within a pre-selected period of time, such as 3 months.Alternatively, the account status may still have an overlimit condition.That is, there may be situations where a customer may pay off past duepenalty fees while a member of the payment plan, yet when completed,there may be an overlimit condition based on charges that exceeded theprimary segment's credit limit. In this exemplary scenario, thecustomer's account may still be in delinquent status based on theoverlimit condition, and financial account provider 1200 may begincharging overlimit fees after the monitoring process has ended. Thecustomer may attempt to re-enroll in the program to attempt payments onthe newly charged penalty fees. Financial account provider 1200,however, may take performance on the payment plan into considerationwhen determining whether such a customer would be included in the targetcustomer base. Further, financial account provider 1200 may performvarious other tasks associated with customers who successfully completesthe payment plan, including but not limited to, adjusting the customer'scredit limit, interest rates, fees, and the like.

As described, methods, systems, and articles of manufacture consistentwith embodiments of the present invention enable credit card customerswho have credit card accounts that have accumulated penalty fees toreestablish a good account standing by joining a payment plan offered bythe financial account provider. The payment plan may allow the customeran opportunity to pay off outstanding penalty fees while not having suchpenalty fees, or other types of fees, charged to their account.Therefore, such methods, systems, and articles of manufacture enable afinancial account provider to reduce the number of delinquent customers,while offering these customers payment options that enable them to gettheir accounts back into good standing with the financial accountprovider.

Although embodiments of the present invention have been described withreference to the exemplary system environment 1000 of FIG. 1, oneskilled in the art can appreciate that various other configurations maybe employed. Furthermore, the configurations of the payment plan itself,including parameters, segment formats, and processing thereof may beadjusted to meet the needs of the financial account provider and itscustomers, without departing form the spirit and scope of the presentinvention.

Other embodiments of the invention will be apparent to those skilled inthe art from consideration of the specification and practice of theexemplary embodiments of the invention disclosed herein. For example,the process steps shown in FIGS. 2-4 are not limited to the sequencesdescribed above. Variations of these sequences, such as the removaland/or the addition of other steps may be implemented without departingfrom the spirit of the embodiments of the present invention. Forexample, financial account provider 1200 may apply a payment receivedproportionally to the new segment and the primary segment, based on thebalance in the new segment. That is, suppose the new segment associatedwith a financial account has a balance of $50 and a payment of $150 isreceived to be credited to the account. Financial account provider 1200may apply $50 of the $150 payment to the new segment and the remaining$100 to the primary segment associated with the financial account.

Additionally, the present invention may be applied to financial accountsother than credit card accounts. Any financial institution that providesfinancial accounts to customers may employ methods, systems, andarticles of manufacture consistent with embodiments of the presentinvention. For example, a bank which provides financial loans tocustomers may have a customer who is delinquent on payments associatedwith a loan. The bank may be configured to offer a repayment plan to thecustomer and monitor the customer's account progress during the plan, inaccordance with certain embodiments of the present invention.

Furthermore, although embodiments of the present invention are describedas being associated with data stored in memory and other storagemediums, one skilled in the art can appreciate that these aspects canalso be stored on or read from other types of computer-readable media,such as secondary storage devices, including: hard disks, floppy disks,or CD-ROM; a carrier wave from the Internet; or other forms of RAM orROM. Accordingly, the specification is intended to be exemplary and theinvention is not limited to the above described embodiments. Instead,the present invention is defined by the appended claims and their fullscope of equivalents.

1. A method for managing a financial account, comprising: providing apayment plan offer to a customer associated with a financial account,the financial account comprising a first segment with a balanceincluding at least one penalty fee; receiving a response from thecustomer indicating acceptance of the offer; creating, based on theresponse from the customer, a second segment associated with financialaccount; applying the at least one penalty fee to a balance of thesecond segment and removing the at least one penalty fee from thebalance of the first segment; and monitoring payment activity associatedwith the financial account during a predetermined time period.
 2. Themethod of claim 1, wherein monitoring payment activity comprises:determining whether a predetermined payment is received within thepredetermined time period, wherein the predetermined payment andpredetermined time period are indicated in the offer to the customer. 3.The method of claim 1, wherein monitoring payment activity furthercomprises: applying payments from the customer to the balance of thesecond segment until the balance is equal to zero; and creditingsubsequent payments associated with the financial account to the balanceof the first segment.
 4. The method of claim 3, wherein the financialaccount is not charged additional penalty fees that the financialaccount would be eligible to receive during the predetermined timeperiod.
 5. The method of claim 1, further comprising: changing a statusof the financial account from a delinquent status to a non-delinquentstatus based on a determination that the penalty fee balance is zero. 6.The method of claim 1, wherein the at least one penalty fee is a fee isbased on the existence of at least one of a past due payment and anoverlimit charge to the financial account.
 7. A method of managing afinancial account, comprising: maintaining a file containing informationassociated with a financial account, the financial account including atleast a first segment with a first balance; creating a second segment inthe file, the second segment including a second balance; modifying thefirst balance based on the second balance; determining whether thesecond balance is below a threshold value based on a payment; andapplying the payment to one of the first balance and the second balancebased on the determination.
 8. The method of claim 7, wherein the secondbalance reflects at least one penalty fee charged to the financialaccount by an entity that provides the financial account.
 9. The methodof claim 8, wherein the at least one penalty fee is associated with atleast one of an overlimit penalty fee and a past due penalty fee. 10.The method of claim 9, wherein the financial account is not charged anyadditional penalty fees while the second balance is above zero.
 11. Themethod of claim 7, wherein modifying the first balance comprises:subtracting the second balance from the first balance.
 12. The method ofclaim 7, wherein the first segment is associated with a first interestrate applied to the first balance and the second segment is associatedwith a second interest rate applied to the second balance.
 13. Themethod of claim 11, wherein the second interest rate is lower than thefirst interest rate.
 14. The method of claim 11, wherein the secondinterest rate is zero.
 15. The method of claim 7, wherein applying thepayment comprises: crediting the payment to the first balance when it isdetermined that the second balance is below the threshold value; andcrediting the payment to the second balance when it is determined thatthe second balance is above the threshold value.
 16. A method performedin a system including a first computer associated with a customer andsecond computer associated with a financial institution, comprising:receiving, at the first computer, an offer from the second computer forparticipation in a payment plan associated with a financial account, thefinancial account including a first balance including one or morepenalty fees; providing, to the second computer, a response to theoffer, wherein the response includes an acceptance by the customer toparticipate in the payment plan, and wherein the response causes thesecond computer to reduce the first balance by an amount substantiallyequal to the one or more penalty fees; providing a first payment to thefinancial institution, the first payment being credited to a secondbalance that initially is an amount equal to the one or more penaltyfees; providing one or more subsequent payments to the financialinstitution, the subsequent payments being credited to the secondbalance until the second computer determines that the second balance iszero, wherein any payment provided to the financial institution afterthe second balance is determined to be zero is credited to the firstbalance.
 17. A system for managing a financial account, comprising: aprocessor; and a memory including a data structure reflecting afinancial account, the data structure including: a first balance segmentreflecting charges associated with transactions applied to the financialaccount, and a second balance segment reflecting fees charged againstthe financial account based on an occurrence of at least onepredetermined event, wherein the processor is configured to execute aprocess that reduces the second balance by an amount equal to a receivedpayment based on a determination that the second balance is above zero.18. The system of claim 17, wherein the process, when executed by theprocessor, reduces the second balance based on one or more subsequentreceived payments until the second balance is zero, and reduces thefirst balance based on payments received after the second balance iszero.
 19. The system of claim 17, wherein the process, when executed bythe processor, applies a first portion of an amount equal to a receivedpayment to the second balance and a second portion of the amount to thefirst balance, wherein the first portion is equal to the second balance.20. A computer-readable medium including instructions for performing amethod, when executed by a processor, the method comprising: providing apayment plan offer to a customer associated with a financial account,the financial account comprising a first segment with a balanceincluding at least one penalty fee; receiving a response from thecustomer indicating acceptance of the offer; creating, based on theresponse form the customer, a second segment associated with financialaccount; applying the at least one penalty fee to a balance of thesecond segment and removing the at least one penalty fee from thebalance of the first segment; and monitoring payment activity associatedwith the financial account during a predetermined time period.
 21. Thecomputer-readable medium of claim 20, wherein monitoring paymentactivity comprises: determining whether a predetermined payment isreceived within the predetermined time period, wherein the predeterminedpayment and predetermined time period are indicated in the offer to thecustomer.
 22. The computer-readable medium of claim 20, whereinmonitoring payment activity further comprises: applying payments fromthe customer to the balance of the second segment until the balance isequal to zero, and crediting subsequent payments associated with thefinancial account to the balance of the first segment.
 23. Thecomputer-readable medium of claim 22, wherein the financial account isnot charged additional penalty fees that the financial account would beeligible to receive during the predetermined time period.
 24. Thecomputer-readable medium of claim 20, further comprising: changing astatus of the financial account from a delinquent status to anon-delinquent status based on a determination that the penalty feebalance is zero.
 25. The computer-readable medium of claim 20, whereinthe at least one penalty fee is a fee is based on the existence of atleast one of a past due payment and an overlimit charge to the financialaccount.
 26. A computer-readable medium including instructions forperforming a method, when executed by a processor, the methodcomprising: receiving, from a server computer, a payment plan offerassociated with a financial account, the financial account comprising afirst segment with a balance including at least one penalty fee;providing a response indicating acceptance of the offer to the servercomputer, wherein, based on the response, a second segment associatedwith financial account is created and the at least one penalty fee isapplied to a balance of the second segment and the at least one penaltyfee is removed from the balance of the first segment; and providingpayment to an account provider that monitors payment activity associatedwith the financial account during a predetermined time period.
 27. Thecomputer-readable medium of claim 26, wherein each of a plurality ofprovided payments is applied to the balance of the second segment untilthe balance is equal to zero and subsequent payments associated with thefinancial account are credited to the balance of the first segment. 28.The computer-readable medium of claim 27, wherein the financial accountis not charged additional penalty fees that the financial account wouldbe eligible to receive during the predetermined time period.
 29. Thecomputer-readable medium of claim 26, wherein a status of the financialaccount is changed from a delinquent status to a non-delinquent statusbased on a determination that the penalty fee balance is zero.